Press Release

IRS Chief Counsel’s Office Demanded Information on 2010 Election Activity of Tea Party ApplicantsOversight, Ways and Means Committees request new documents from IRS Acting Commissioner about campaign oriented scrutiny of Tea Party applicants, decision to overrule career official, and delays created by IRS Chief Counsel’s office

WASHINGTON – House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA), House Ways and Means Committee Chairman Dave Camp (R-MI), Oversight Subcommittee Chairman Jim Jordan (R-OH), and Ways and Means Subcommittee Chairman Charles Boustany Jr. M.D. (R-LA), today in a letter to Acting IRS Commissioner Daniel Werfel, requested new documents related to IRS employee discussions about the 2010 election, the Citizens United Supreme Court decision, and the tax-exempt status of Tea Party groups. The request follows testimony from career IRS officials in Washington, D.C. that Director of the IRS Exempt Organizations division Lois Lerner overruled the judgment of a career Washington, D.C. IRS lawyer and ordered Tea Party cases to go through a multi-layer review that included her senior advisor and the IRS Chief Counsel’s office. The IRS Chief Counsel’s office is led by William Wilkins, one of two Obama Administration political appointees at the IRS.

“As a part of this ongoing investigation, the Committees have learned that the IRS Chief Counsel’s office in Washington, D.C. has been closely involved in some of the applications. Its involvement and demands for information about political activity during the 2010 election cycle appears to have caused systematic delays in the processing of Tea Party applications,” wrote Issa, Camp, Jordan, and Boustany in their letter to Werfel. “[B]ased on his decades of experience, [career IRS official Carter Hull] determined he had enough facts to make recommendations whether to approve or deny the applications … However, Mr. Hull’s recommendations were not carried out. Instead, according to Michael Seto, the head of Mr. Hull’s unit in Washington, Lois Lerner instructed that the Tea Party applications go through a multi-layer review that included her senior advisor and the Chief Counsel’s office.”

Key points from testimony of career IRS officials:

Carter Hull, a tax law specialist and self-described 501(c)(4) expert with 48 years of experience, testified that he sent development letters, and once he received responses, based on his decades of experience, determined he had enough facts to make recommendations whether to approve or deny the applications.

Mr. Hull’s recommendations were not carried out. Instead, according Michael Seto, the head of Mr. Hull’s unit in Washington D.C., Lois Lerner instructed that the Tea Party applications should go through a multi-layer review that included her senior advisor and the Chief Counsel’s office.

According to Mr. Hull, sometime in the winter of 2010-2011, the senior advisor to Lois Lerner told him the IRS Chief Counsel’s office would need to review these applications. Mr. Hull also indicated this was the first time in his 48 year career at the IRS he was told to send an application to Ms. Lerner’s senior advisor.

It was not until August 2011 that the Chief Counsel’s office held a meeting with Mr. Hull, Ms. Lerner’s senior advisor, and other Washington D.C. officials to discuss these test applications. During the intervening months, these applications languished.

The Chief Counsel’s office instructed Mr. Hull that they needed updated information to evaluate the applications. Since the applications were up-to-date months earlier, when Mr. Hull made his recommendations, Mr. Hull testified that he found this request from the Chief Counsel’s office surprising. The Chief Counsel’s office also discussed the possibility of a template letter to develop all the Tea Party applications, including those being held in Cincinnati. Mr. Hull explained that all the applications were different and that a template was impractical.

Mr. Hull’s supervisor, Ronald Shoemaker, provided insight on the type of additional information sought by the Chief Counsel’s office—namely, information about the applicants’ political activities leading up to the 2010 election.

The lengthy review of the test applications in Washington created a bottleneck and caused the delay of other Tea Party applications in Cincinnati. Indeed, multiple IRS employees in Cincinnati – including Elizabeth Hofacre — have told the Committee they were waiting on guidance from Washington on how to move the applications forward.

Mr. Hull explained that he could not provide advice to Ms. Hofacre because his hands were tied by his superiors in Washington. Therefore, none of these applications were approved or denied during the time he worked with Ms. Hofacre on the cases.

The head of the Cincinnati office, Cindy Thomas, testified that she continuously asked senior Washington officials when guidance was coming, but it was to no avail.